Nigeria’s external accounts are on track for further strengthening in 2026, with the current account surplus projected to climb to $18.81 billion—equivalent to 11.16% of gross domestic product—according to the Central Bank of Nigeria’s newly released Macroeconomic Outlook.
The forecast represents a notable improvement from the estimated $16.94 billion surplus, or 10.94% of GDP, expected for 2025, signaling continued momentum in the country’s external position despite persistent structural headwinds.
Oil Recovery and Export Diversification Drive Growth
The apex bank’s projections paint a picture of an economy benefiting from improved oil sector performance and deliberate policy interventions aimed at diversifying export revenues. Export receipts are forecast to reach $58.26 billion in 2026, up from $54.59 billion in 2025—a gain driven by anticipated increases in both petroleum and non-petroleum exports.
Central to the oil sector outlook is the expectation of higher domestic crude production, which the CBN attributes to enhanced security around oil installations and renewed investments in the sector. Nigeria has struggled for years with pipeline vandalism and theft that severely constrained output, but recent security improvements appear to be bearing fruit.
On the non-oil front, the bank expects continued growth in agricultural commodity and fertilizer exports, bolstered by government initiatives designed to strengthen the export value chain. Two recent policy launches—the National Export Trading Company, aimed at addressing longstanding gaps in export infrastructure, and the National Intellectual Property Policy, intended to boost creative industry exports—are expected to provide additional support for non-oil receipts.
Import Pressures and Widening Deficits
However, the improving export picture comes with caveats. Total imports are projected to rise to $43.27 billion in 2026 from $39.92 billion in 2025, reflecting increased demand for capital goods as economic activity expands—a sign of growth but also of continued import dependence.
The services account presents a more concerning picture, with the deficit expected to widen to $13.68 billion in 2026 from $12.80 billion in 2025. The CBN cited higher payments for business and transport services, driven by increased demand for research and development services and rising freight charges linked to the uptick in non-oil imports.
The primary income account is also projected to remain in deficit at $8.62 billion, as higher investment income payments flow to nonresident investors. The central bank noted that relatively attractive domestic yields continue to draw foreign portfolio investment, which subsequently increases interest and dividend outflows—a classic trade-off for capital-scarce economies seeking foreign investment.
Remittances Remain Critical Lifeline
A bright spot in the outlook is the secondary income account, projected to reach a $26.13 billion surplus in 2026, up from $23.82 billion in 2025. This growth is expected to be driven primarily by stronger diaspora remittances and higher transfers, with some inflows also anticipated to support election-related activities during the period.
Remittances have become an increasingly critical component of Nigeria’s external balance, often exceeding foreign direct investment and providing vital foreign exchange support to the economy.
Structural Challenges Persist
While the CBN’s projections suggest continued improvement in Nigeria’s external position, they also underscore persistent structural vulnerabilities that have long characterized Africa’s largest economy. Rising import dependence, widening services deficits, and growing income outflows linked to foreign investment point to an economy still heavily reliant on external capital and imported goods.
The challenge for policymakers will be sustaining the gains from oil sector reforms and export diversification while addressing these underlying structural weaknesses. The success of recent policy initiatives—particularly those aimed at strengthening non-oil exports and improving the export value chain—will be critical to determining whether Nigeria can build a more resilient and balanced external position in the years ahead.
As Nigeria approaches another election cycle, the stability of its external accounts will remain a key indicator of economic health and a critical factor in maintaining investor confidence in Africa’s most populous nation.
WHAT YOU SHOULD KNOW
Nigeria’s current account is expected to strengthen to an $18.81 billion surplus in 2026, driven primarily by improved oil production, growing non-oil exports, and strong diaspora remittances. However, this positive outlook masks deeper structural problems: the country remains heavily dependent on imports, faces widening service payment deficits, and continues to lose substantial income to foreign investors.
While the oil sector recovery and export diversification are delivering short-term gains, Nigeria has not yet addressed its fundamental economic challenge: reducing its reliance on imported goods and services while building sustainable, competitive domestic industries. Until these structural issues are addressed, the country’s external balance will remain vulnerable to fluctuations in commodity prices and shifts in investor sentiment.
